Exhibit 1 - Agenda Information Sheet - Additional FundsCity of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: February 21, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
ratifying the expenditure of funds by the City Manager, for the emergency purchase of transformers for
Denton Municipal Electric; and providing an effective date (File 8169-1 – awarded to Solomon Corporation,
in the not-to-exceed amount of $108,075.00). The Public Utilities Board recommends approval (5 - 0).
INFORMATION/BACKGROUND
This Declaration is for rebuilt electric utility transformers needed to provide restoration of, and service to
customers and is founded on current supply chain issues being experienced across the electric utility
industry and Denton Municipal Electric (DME).
Section 252.022 of the Texas Local Government Code provides exemptions associated with purchasing
requirements which include (1) a procurement made because of a public calamity that requires the
immediate appropriation of money to relieve the necessity of the municipality’s residents..., and (2) a
procurement necessary to preserve or protect the public health or safety of the municipality’s residents.
Denton’s current inventory of transformers is at levels reserved for normal, daily electric service operational
responsibilities and emergency response. For new construction, DME prioritizes transformers on a project
first come, first ready basis for customers and developers that have inspections and permits complete. DME
has forty-five projects designed and released to construction or ready to be released for construction. DME
has another 128 projects currently in the design phase. DME has notified customers and developers that the
utility may not be able to provide immediate service due to the low inventory of transformers and the current
supply chain issues.
Supply chain issues for distribution transformers continue to be a challenge. Major shortages are being
experienced nationwide of critical electric utility equipment such as electric distribution transformers,
underground cables, substation equipment, and other equipment necessary to maintain and provide electric
service in Denton. The need for this Declaration of an Emergency stems from lead times on transformers
approaching 76 weeks in some instances. Vendors cannot provide reliable estimates of lead times for
equipment. DME has seen an increase of 250% or more in the average cost of transformers supplied by its
contracted vendor. Table 1 provides a list of orders for transformers needed under this Declaration of an
Emergency to help mitigate some of the supply chain issues and help support DME’s stock levels of
transformers. Failure to declare an emergency could cause inventory levels to drop further below minimum
acceptable levels.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Table 1
Transformer Size Transformer Cost Quantity Total Cost
750kVA 208/120 PM $35,450.00 1 $35,450.00
750kVA 480/277 PM $35,450.00 1 $35,450.00
750kVA 480/277 PM $37,175.00 1 $37,175.00
Purchase Order Total Cost: $108,075.00
Approval of a Declaration of an Emergency, with a one-time spend authority of $108,075.00, allows DME
to better position its transformer inventory for service and minimize the growing backlog of transformer
orders.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On December 13, 2022, City Council approved the emergency purchase with Solomon Corporation
(Ordinance 22-2500).
On February 13, 2023, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Approve the emergency purchase of rebuilt electric utility transformers for Denton Municipal Electric, in a
not-to-exceed amount of $108,075.
PRINCIPAL PLACE OF BUSINESS
Solomon Corporation
Solomon, KS
ESTIMATED SCHEDULE OF PROJECT
Delivery of the items will occur within 365 days after receipt of order.
FISCAL INFORMATION
These items will be funded from FY22/23 Transformers account 605227500.1350.3680. Purchase Order
#202446 has been entered into the Purchasing software system in the amount of $108,075. The budgeted
amount for this item is $108,075.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Declaration of Emergency
Exhibit 3: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Randy Key, 940-349-7665.
Legal point of contact: Marcella Lunn at 940-349-8333.